House budget rollout begins

It favors, teachers, state workers, droput prevention; a mental health service is cut

House leaders on Thursday began moving some major pieces of what is likely to be a $21 billion budget proposal that will include modest pay increases for teachers and state employees, more money for high school dropout prevention and a deep cut in a much-maligned community services program for the mentally ill.

Highlights of what House budget writers have proposed:

Taxes and fees

The House did not go along with Gov. Mike Easley's proposed tax increases on cigarettes and alcoholic beverages. The House plan will include about $50 million in tax relief by expanding tax credits to lower income working families and small businesses who offer health insurance, and by offering a property tax exemption to veterans who have suffered disabling injuries in service and their surviving spouses.

Raises

State Rep. Mickey Michaux, a Durham Democrat, said the House would offer a 3 percent pay raise to teachers and school administrators, and raises of 2.75 percent or $1,100, whichever is greater, to every one else. Retirees would get a 2.2 percent cost of living increase. Easley has proposed a 7 percent raise for teachers and a 6 percent raise for school administrators. Everyone else would get a 1.5 percent raise and a $1,000 one-time bonus. Retirees would get a 1.2 percent cost-of-living adjustment.

Education

House Speaker Joe Hackney's signature program, dropout prevention grants, would get a big boost, up to $15 million from $7 million last year. The program allows communities across the state to pitch local programs that help students stay in school and graduate.

House leaders also called for less funding for an expansion of Easley's More at Four pre-kindergarten education program -- $23 million vs. $45 million.

The House also expects lottery proceeds to cover Easley's program to reduce class size in elementary schools, while Easley is seeking $11 million from the taxpayer-supported general fund.

House members would also make more part-time students eligible for grants offered to North Carolinians who attend the state's private colleges and universities. The Legislative Tuition Grant would go to part-time students taking at least six credit hours a semester at a cost of $1.75 million. The current threshold is nine hours a semester.

Health and Human Services

The House is proposing much deeper cuts in the community support services program for the mentally ill. Easley proposed nearly $31 million in cuts; the House upped that to $86 million, largely by proposing to tighten eligibility requirements. Dempsey Benton, secretary of the Department of Health and Human Services, said that cut goes too far and would reach into core services that the mentally ill need. He said the department could live with $67 million in cuts which is practically a split down the middle between what the House and Easley have proposed.

Justice and Public Safety

The House proposal includes $1 million to help sheriffs enforce federal immigration law, and would spend roughly $400,000 more than Easley to prevent rape victims from having to pay out-of-pocket costs of forensic exams.

Though it does not appear in budget documents released Thursday, $10 million in gang- prevention funds will be in the House budget proposal, Michaux said. He said the money would be contingent upon the passage of legislation that toughens penalties for gang-related crime.